1. Field
This disclosure is directed to managing health care resources. More particularly, the disclosure is directed to normalizing and comparing healthcare provider supply expenses.
2. Description of the Related Art
Supply costs are increasingly scrutinized as overall operating costs rise for healthcare providers (HCPs). The supply costs can include the sum of all purchases of patient supplies, surgical supplies, general medical supplies, laboratory supplies, linens, office supplies, and the like. These costs may constitute a significant percentage of total operating costs for a HCP. Accordingly, a number of metrics have been instituted to measure HCP supply costs. For example, supply costs are frequently measured as a percentage of revenue of total expenses, percentage of adjusted patient days (e.g., the total gross revenue divided by total inpatient revenue multiplied by the number of patient days), or per adjusted discharge. While such metrics may provide information on a particular HCP's performance with respect to supply spending, the metrics provide little, if any, information regarding the HCP's supply costs as compared to other HCPs, because the metrics assume that the types of patients the HCP serves are relatively the same.
External benchmarking methods, such as Case Mix Index (CMI), are commonly used to adjust for patient mix differences between HCPs, such as hospitals. For instance, CMI is calculated by averaging a Diagnosis Related Group (DRG) (or Medicare Severity DRG, MS-DRG) weighting for all patients served over a predetermined calculating period. In this regard, all patients are coded with a DRG, or MS-DRG that represents the resource consumption requirements based on, e.g., a patient's diagnosis, a patient's treatment, a patient's age, a patient's sex, a procedure performed on the patient, and the like.
However, external benchmarking methods like CMI are frequently inadequate to accurately predict supply expenses, or to “normalize” the supply expenses of HCPs to allow for accurate evaluation of resource management by the HCP or comparison to the resource management of other HCPs.